Adjusted for inflation, FAO’s Food Price Index (FPI) rebounded strongly in August after slight declines in June and July. These two down months, however, followed a full year of monthly gains.
Among the subindexes, sugar saw the most significant gains in August. This was the fifth straight month of gains for the sugar index and follows continued concerns over a smaller Brazilian sugar crop due to weather damage (frost, drought) and a possible increase in diversion to ethanol.
The vegetable oils subindex is showing the largest increase year on year, also after a large rebound after two down months. Prices were reported higher for palm (production concerns), rapeseed (strong European demand), and sunflower oil (logistical concerns).
The cereals index has been up in nine of the last 12 months. Wheat is seeing price support, along with barley, though prices were more mixed for corn, sorghum, and rice.
August was the seventh straight month of gains for the meat index. The dairy index saw its third month of declines.